Massachusetts budget bill allows utilities to recoup added cost of hydropower corridor through ratepayers

A budget signed by Massachusetts Gov. Maura Healey this week will allow utilities to raise rates to make up for hundreds of millions of dollars in additional costs to complete a transmission line to bring Canadian hydropower to the New England electricity grid.

The head of Central Maine Power Co.'s corporate parent Avangrid has said the cost of the $1 billion project grew to $1.5 billion as litigation delayed construction and inflation caused prices to creep upward.

Legislation included in the supplemental budget adopted Monday allows transmission service agreements to be renegotiated and additional costs to be passed along to Massachusetts ratepayers to cover the added costs.

Avangrid provided the increased costs to Massachusetts’ electricity distribution companies to adjust the rate in the parties’ transmission services agreements, which would be subject to Department of Public Utilities review and approval, Avangrid spokesperson Leo Rosales said in a statement Tuesday.

He praised Healey and lawmakers for taking action to “deliver this critical project and needed clean power to benefit the entire New England region.”

Avangrid partnered with Hydro-Quebec on the New England Clean Energy Connect to supply 1,200 megawatts of hydropower to meet green energy goals in Massachusetts. That would be enough electricity to power about a million homes.

The 145-mile transmission line will stretch from Lewiston, Maine, to the Canadian border.

It received all regulatory approvals but was plagued by delays, litigation and a referendum in which Maine voters said “no” to the project.

It was allowed to move forward after a Maine jury concluded that the developers had a constitutional right to proceed despite the referendum.

Construction resumed in August on a transmission hub that's critical to the project in Lewiston. But it's unclear when other work will restart.

Workers had already begun removing trees and setting utility poles on a disputed portion of the project, a new 53-mile section cut through the woods in western Maine, before the project was put on hold.

The project was envisioned to meet Massachusetts' clean energy goals, and the cost is fully borne by ratepayers in that state.

However, supporters say electricity would lower energy costs across New England as well as reduce carbon pollution.